Commercial Investment Real Estate March/April 2017 | Page 20

LEGAL
BRIEFS
Negotiating Finesse
Landlords and tenants have equal stakes in negotiating the best leases.
eases for multiple types of businesses are readily avail-
able in today’s steady economy. Negotiating for the best
terms for both owners and tenants, however, can be
tricky but is attainable.
For business owners looking for the perfect storefront, leasing
commercial space can take the biggest chunk out of their business
expense budget, making due diligence essential. For CCIMs
representing the landlord, the level of work needed to protect
the client’s interests will depend on the size of the client: a large
company with in-house resources or a smaller business. Those
representing the tenant will be protecting the interests of a person
who often has little experience of the industry.
L
Perspective of Tenants
It is important that commercial lease professionals be particularly
skilled at forecasting a tenant’s needs, as well as the reasons for
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March | April 2017
specifi c tenant requests. Since commercial tenants typically stay
in a building for at least fi ve years and up to 25 years, the negotia-
tion process needs to be productive.
If tenants need something from their landlord during those
years, it helps if the landlord is positive during the initial nego-
tiations. The best result occurs when both the landlord and the
tenant walk away feeling good about the outcome. Of course,
both parties will need to compromise on certain issues, but nei-
ther the tenant nor the landlord should feel their needs were
completely disregarded.
Due diligence for the CCIM designee representing the tenant
is crucial. A commercial lease provides a roadmap for the tenant
and landlord relationship. This means such issues as exclusive
use, provisions and exclusions, inspections, allowable activities for
the property, and the landlord’s legal rights and responsibilities
need to be clearly defi ned.
COMMERCIAL INVESTMENT REAL ESTATE
by Morris H. Lilienthal